Standard & Poor's past prijs identificatienummers financiële producten aan na druk Europese Commissie (en)

Standard & Poor's (S&P) has offered to change its pricing policy in Europe with regard to the distribution of International Securities Identification Numbers (ISINs) issued in the United States. This is to address European Commission concerns that S&P, a subsidiary of The McGraw-Hill Companies, Inc., is overcharging for the use of these numbers by information service providers and banks in Europe. Securities identifiers are essential for interbank communication, clearing and settlement, reporting to authorities and the management of financial institutions' database on securities in their portfolio. Under the commitments S&P, which acts as the numbering agency in the US, offers to distribute US ISINs to information service providers for redistribution in Europe and to financial institutions wishing to source US ISINs directly from S&P for a maximum total price of USD 15 000 per year. Moreover, S&P commits to abolish all charges to users that source ISINs not directly from S&P but from information service providers. The Commission is asking interested parties to comment on the commitments it negotiated before making them binding on S&P.

"After several rounds of discussions, S&P is committing to address our competition concerns by limiting its price for the distribution of identification numbers for US securities and by abolishing charges altogether for those indirect users that get the numbers from other companies. We will market test the commitments received and make them legally binding on S&P if satisfied with the results. The deal promises to significantly reduce the cost of using US ISINs. Freer and cheaper flow of essential financial information will improve the efficiency of our financial markets to the benefit of consumers" said Joaquín Almunia Commission Vice President in charge of Competition Policy.

The Commission took the view in a Statement of Objections (SO) sent in November 2009 (see MEMO/09/508) that Standard & Poor's was charging abusive prices for the distribution in the European Economic Area (EEA) of International Securities Identification Numbers (ISINs) issued in the US. ISINs are based on international standard ISO 6166, which was developed as a public service to the financial services industry. In line with the ISO standard, US ISINs are derived from CUSIPs, the identifiers developed for national purposes in the US. S&P, a division of The McGraw-Hill Companies, Inc., has been designated as the numbering agency for US securities, and as such has a legal monopoly for the issuance and the first hand distribution of US ISINs. S&P distributes US ISINs to information service providers for redistribution and to some financial institutions that choose to source them directly from S&P (direct users). Most financial institutions, however, prefer to obtain ISINs from information service providers (indirect users).

The Commission has taken the preliminary view that the price charged by S&P for the distribution of US ISINs to European users is potentially abusive because it did not comply with the principles set by ISO, which the Commission regarded as a benchmark for fair prices. The ISO principles provide that there should be no charges in the absence of a direct supply (i.e. to indirect users), and the prices charged for a direct supply (i.e. to direct users and ISPs) should not exceed the distribution costs incurred. In contravention of the ISO benchmark, S&P applied charges vis-à-vis indirect users and its prices to ISPs and direct users seemed in the Commission's view to have exceeded the costs incurred in distribution. The SO contends that S&P's behaviour could be in breach of Art 102 of the Treaty on the Functioning of the EU which bans abuses of monopoly or dominant positions. S&P contested the Commission's allegations but in order to meet the Commission's concerns it entered into negotiations on potential commitments.

Following lengthy discussions, S&P offered to abolish all charges to indirect users for the use of US ISINs within the EEA as these users will already have paid the distribution cost in the form of fees charged by information service providers and S&P does not incur any costs in this process. Current licensing agreements between indirect users and S&P will also be discontinued. Indirect users will, however, have to conclude an agreement with S&P that prohibits the extraction, use or resale to third parties of the numerically similar CUSIPs. This can be done through an on-line click-through agreement to avoid administrative burden.

In addition, in respect of information service providers and direct users, S&P commits to distribute ISIN records separately from other added value information (which was the reason advanced by S&P for the higher prices despite the fact that users only need the ISIN number and minimum descriptive data - together referred to as ISIN Record - to identify a security). US ISIN Records will be delivered through a data-feed on a daily basis. The initial price of this service would be set at USD 15 000 (around € 10 101) per year, to be adjusted each year in line with inflation. These agreements would contain the same restrictions as those with indirect users, namely the non-extraction of CUSIPs.

The Commission is publishing a summary of the case and of the commitments to give interested parties the opportunity to comment before making the commitments binding by way of a decision under Article 9 of the EU's antitrust Regulation 1/2003. These so-called commitments decisions do not conclude that there is an infringement of EU antitrust rules but legally bind the companies concerned to respect the commitments offered. If a company breaks such commitments, the Commission can impose a fine of up to 10% of its annual turnover, without having to find an infringement of the antitrust rules.

Stakeholders have one month to react. For summary go to:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2011:144:0028:0030:EN:PDF

The commitments would be valid for five years, which is the usual duration of such commitments in antitrust cases. S&P also offered to submit to the Commission a yearly report on the implementation of the commitments.